Step-by-Step Guide to Forming an LLC in New York

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New York LLC Quick Facts

How much does it cost to form an LLC in New York?

Initial LLC Filing Fees

 

  • Articles of Organization – $200
  • Certificate of Publication – $50

 

Recurring State Fees – Biennial Report – $9

How long does it take to get an LLC in New York?

  • By Mail – 1-2 weeks
  • Online – Instantly

Don’t want to form an LLC by yourself? 

Let IncFile or IncAuthority guide you through the LLC formation process, so you know everything was done right. Only pay state fees!

Quick Reference

The Limited Liability Company (LLC) is a popular entity structure for businesses starting in New York.  The LLC provides personal liability protection and has the potential to save money on taxes. With our guide, you can learn how to form an LLC in New York without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Cost to Form an LLC in New York

To form a Limited Liability Company in New York, file the Articles of Organization with the New York Division of Corporations.  The LLC filing fee is $200.

Approval for the LLC typically takes between 1-2 weeks for mailed-in filing or just a few minutes when filing online.

If you have questions, contact the New York Division of Corporations at 518-473-2492.

Steps to Form a New York LLC

The steps for filing online or by mail are largely the same.  The screenshots show how to file online. To file by mail, download the New York LLC Articles of Organization (Form DOS-1336-f).

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

Licensed occupations such as accountants, attorneys, podiatrists, physical therapists, psychologists, veterinarians, acupuncturists, etc. have the option of filing for a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead. The formation of a PLLC is very similar to the LLC.

Step 1: Get Started

How to Form an LLC in New York

  • Next, select “Articles of Organization for a Domestic Limited Liability Company.” There is a note that this entity is not for professional service Limited Liability Companies.  A professional LLC or PLLC is a business that offers a service that has to be licensed in the state of New York.  To see more about what professions need licensing, see Step 5: New York Licenses & Permits.

Form Articles of Organization NY LLC

Step 2: Name the LLC

Enter the name you want for the LLC.  The LLC’s name also has to differ from other entity names registered with the Division of Corporations.  Check on LLC name availability in New York before filing to be sure the one you want is available.

Additionally, the name of the LLC must include one of the following phrase or abbreviations at the end of the business name:

  • Limited Liability Company
  • L.L.C.
  • LLC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

If there is a name you want to use but aren’t ready to form the LLC, the Application for Reservation of Name can be filed to hold the name for up to 60 days. The state filing fee for a name reservation is $20, paid to the New York Department of State.

Before settling on a name, you may want to see if a domain name is also available in order to match your business name and website address.

Step 3: Opening Statement

This is an optional section where the filer states, ” THE UNDERSIGNED, being a natural person of at least eighteen (18) years of age, and acting as the organizer of the limited liability company hereby being formed under Section 203 of the Limited Liability Company Law of the State of New York certifies that:”

This just says the filer agrees the rest of the information in the Articles of Organization are true.

NY LLC Opening Statement

Step 4: Name

The LLC’s name is being requested again to verify the name you are choosing.  This section must match the one previously entered in Step 2.

If any part of the name has a foreign word, enter the English translation in the next field.

NY LLC Name

Step 5: Purposes

This is an optional statement you can agree to or not that says the LLC is being formed “To engage in any lawful act or activity within the purposes for which limited liability companies may be organized pursuant to Limited Liability Company Law provided that the limited liability company is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency, or other body without such consent or approval first being obtained.”

Check the box if it applies or not and proceed.

New York LLC Business Purposes

Step 6: County

Select the county where the primary office of the LLC will be located from the drop-down menu.

NY LLC County Office

Step 7: Service of Process

In this section, enter the mailing address where the Department of State should send notices of lawsuits.

This address does not have to be in New York, but it does have to be in the continental United States.

Some filers use a third-party service company to receive these types of notices on their behalf.  These services must already be registered with the Secretary of State, and if you select “Select a Service Company,” a drop-down list with approved companies will appear for you to select from.

Most fliers will enter the location information for the LLC.

Related: What is Service of Process?

New York Limited Liability Company Service of Process

Step 8: Registered Agent

To have an LLC in New York, there must be a person or service with a physical presence in the state.  If it applies, select the “Check if Applicable box.”

If one of the members (owners) will have that presence, this section can be skipped.  Otherwise, a Registered Agent must be identified.  If it is an individual, select the “enter Registered Agent Information” bubble and enter their information.  If the agent is a service, click on the “select a Registered Agent Company” bubble.  Once you do this, a list of services that are registered with the state appears, and you can select from one of those.  Be sure you have already signed up with their service before selecting.

You are not required to pay for a registered agent. Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or still employed.  Hiring a registered agent service like Northwest Registered Agent to be the Registered Agent will reduce unwanted phone calls and mailings.

Learn more about the requirements of a registered agent in New York.

New York LLC Registered Agent

Step 9: Management Structure

This is another optional section asking how the entity is managed.  If it applies, select the “Check if Applicable box.”

If the LLC is managed by members, it is considered a Member-Managed LLC, where the members (typically owners) have an active involvement in the management of the LLC.
If the LLC is managed by a manager, it is considered a Manager-Managed LLC, where the members hire a manager to run the LLC, similar to a CEO of a corporation.

Most LLCs are member-managed.

New York LLC Member Managed Manager

Step 10: Effective Date

The effective date section is optional.

You can choose to elect to have the LLC start immediately upon the filing of the Articles of Organization (which will happen without doing anything).  If you want the LLC to start on a date up to 60 days in the future, select the “Check if Applicable box” and enter a date.

The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year, and the business isn’t going to have any activity until the start of the following year.  By delaying until the following year, they will reduce the number of end of year filings.

Effective Date NY LLC

Step 11: Dissolution Date

This section is optional and provides the ability to set a date to close the LLC.  Most LLCs will choose a perpetual existence (which is the default choice); however, some businesses (usually investment-related) will have a specific closure date.

To include this statement in your Articles, select the “Check if Applicable box” and the appropriate information.

New York LLC Dissolution Date

Step 12: Liability Statement

This optional statement is an indemnification clause that says, “The limited liability company shall defend, indemnify and hold harmless all members, managers, and former members and managers of the limited liability company against expenses (including attorney’s fees, judgments, fines, and amounts paid in settlement) incurred in connection with any claims, causes of action, demands, damages, liabilities of the limited liability company, and any pending or threatened action, suit, or proceeding. Such indemnification shall be made to the fullest extent permitted by the laws of the State of New York, provided that such acts or omissions which gives rise to the cause of action or proceedings occurred while the Member or Manager was in performance of his or her duties for the limited liability company and was not as a result of his or her fraud, gross negligence, willful misconduct or a wrongful taking. The indemnification provided herein shall inure to the benefit of successors, assigns, heirs, executors, and the administrators of any such person.”

Basically, it says the LLC will protect the members and managers of the LLC from the operations of the business, provided those members and managers weren’t negligent in their duties and hold them harmless should there be a lawsuit.

Step 13: Organizer Information

An LLC Organizer is someone involved with the formation of the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney, or accountant, but any of the initial members could be listed as organizers.

Step 14: Signature

Have an organizer of the LLC sign and enter their title, such as Member or Manager.  Here this person is stating the information in the Articles of Organization is correct.

Step 15: Filer

Have the filer sign and provide their contact information.  The filer is most likely going to be the organizer that just signed their name.

Click on “Continue” to proceed.

Step 16: Review

Review that all of the information is correct.  If there are no corrections, click “Continue.”

Step 17: Pay and File

You can optionally add the Federal Employment Identification Number (FEIN).  While not required to file the Articles of Organization, you will eventually need one.

If mailing send the Articles of Organization to:
Department of State, Division of Corporations, State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231

Pay and file the Articles of Organization.

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Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

New York LLC Publication Requirements

Per Section 206 of the New York LLC Act, after the Articles of Organization are filed, an ad has to be published for 6 consecutive weeks in two newspapers or printers.  To meet the Newspaper Publication Requirement, both papers must be located in the same county as the LLC’s principal office, in addition to being approved by the County Clerk of the county where the primary office of the LLC is located. After the notice has run, the publisher of each newspaper will send a filing receipt for proof of publication (Affidavits of Publication of the Newspapers).

Once the affidavits have been sent to you, they will be mailed along with the Certificate of Publication and a $50 filing fee to the Division of Corporations.  The Certificate of Publication has to be submitted within 120 days of the LLC being formed.

Prepare a New York LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: New York operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Occasionally, the bank will request a New York Certificate of Good Standing to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Sales Tax Certificate of Authority – To sell products and certain services in New York State, registration with the New York Department of Taxation and Finance will be necessary.

Related: What Business Licenses are Needed in New York?

Get Business Insurance

Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:

General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.

Related: 7 Types of Insurance Your Business May Need

File the Biennial Statement

LLCs are required to file a biennial statement with the New York State Department of State.  The statement costs $9 every other year.

Related: How to File a New York Biennial Statement

 

Common Questions When Starting An LLC

You can act as your own registered agent, provide you are a resident of the state and are generally available during normal business hours. 

It’s sometimes thought that the LLC and business license are the same, which they aren’t.  Business license requirements vary by location and the type of business being operated. 

An out-of-state LLC wanting to do business in another state will have to register as a foreign LLC with the new state’s Secretary of State.

Businesses that require state licensing and offer professional services such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc. often must file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to that of the LLC.

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